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The cost/benefit analysis of climate-change policies often uses perpetuities in the present value calculations because the costs and benefits of these policies are spread out
The cost/benefit analysis of climate-change policies often uses perpetuities in the present value calculations because the costs and benefits of these policies are spread out over very long horizons. Think of a stream of costs that stretches out indefinitely into the future. How much does the present value of those costs change if the discount rate moves from 3% to 0.1%?
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